Microsoft reported to be testing prototype Surface smartphone

Microsoft, the world renowned software developer, may be looking to expand its hardware range beyond the recently released Surface tablet. According to a report from the Wall Street Journal, the computing firm is currently testing a new smartphone prototype that measures between four and five inches.

The news comes from “people familiar with the situation,” described by the WSJ as unnamed officials at some of Microsoft's Asian component suppliers. The sources went on to say that the proposed design may not enter mass production.

“We’re quite happy this holiday season going to market hard with Nokia, Samsung and HTC. Whether we had a plan to do something different or we didn't have a plan I wouldn't comment in any dimension,” said Ballmer in a statement to WSJ.

"Is it fair to say we're going to do more hardware? Obviously we are... Where we see important opportunities to set a new standard, yeah we'll dive in," said Ballmer last week.

If the rumours do come to fruition it will be a strong indication of Microsoft’s gradual adoption of an Apple-style business model. The market competitor is renowned for its dual production of software and hardware.